Best Ways to Address Internal Theft


Internal theft costs companies between $20 to $40 billion dollars annually, according to the U.S. Chamber of Commerce. Monitoring your employees with video cameras and regular checks only catches the most obvious thieves and won’t catch those with more experience. Rather than spending time trying to catch a thief, a company should aim to prevent theft altogether by use of indirect and, when necessary, direct interventions.
Best Ways to Address Internal Theft
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Checks and Deposit Slips

Most employees don’t need access to checks and deposit slips. Yet, so many companies leave this information in an accessible location. Lock up your checks and deposit slips in the company safe to prevent an employee from obtaining the needed information.

Petty Cash

Petty cash can’t be a fund that employees have access to without discretion. Require approval from a supervisor, record the transaction and reason for the transaction in a computer database not accessible to regular employees and record the total for the petty cash account daily. Reviewing the account regularly makes it less likely that an employee can borrow money from the account and put it back at a later date. If money shows up missing, check the log for all employees that worked that day and interview each employee about the incident.


Avoid letting one person make all of the deposits each day. Talk with your bank about your regular banking habits and ask the bank to notify you of suspicious activity. If a deposit should be in the bank by noon each day, get an account manager that can alert you to any unusual activity. If one supervisor continuously takes the deposit to the bank late, take action and watch that supervisor closely. This could be a sign that the supervisor needs extra time to forge receipts, delete transactions and make up invoices.

Audit Transactions

Rotate employee schedules if the company conducts sales in a retail or food industry environment. Audit the supervisors to determine the average percentage of voided transactions. If one supervisor has a higher percentage of voided transactions, change the schedule to make it more difficult for the supervisor to void transactions and potentially pocket the funds. Voided cash transactions provide a big red flag.

Inventory Checks

If you suspect an employee is stealing money, do an inventory check. Inventory should match your sales. If several items that the employee has voided end up missing, start an internal investigation to catch the employee stealing money on the job. Since a single employee can greatly reduce your profits, it’s worth hiring an investigator that the employee doesn’t know to catch them in the act. If you don’t already have camera systems in place, you may want to research security services in Miami or your particular locale.

How to Proceed After the Investigation

If you launch an investigation of suspected theft or fraud and find the suspected person has stolen from the company, you must tread lightly with how you publicly and privately handle the matter. Even if it looks like an unambiguous case worthy of that employee’s termination, you could potentially bring a lawsuit upon yourself if you fail to handle the matter privately and with the help of a lawyer, especially if that worker is a member of a protected class, is disabled, sick or pregnant.
In the end, treat your employees with respect and be careful of accusing them of stealing anything from your store. Before you accuse an employee of theft, you need to be absolutely certain that they are culpable. In some cases, if you know an employee is stealing and you can’t prove it, you can change the employee’s schedule to work more closely with a trusted manager and prevent them from having an opportunity to steal.

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